Here are the key steps the Ethics Committee should take based on the audit report:
1. Review the audit report findings that Arun and Smita are in violation of the company's code of conduct.
2. Formally determine that Arun accepting personal gifts from suppliers and Smita misusing company resources for personal gain are unacceptable violations.
3. Notify Arun and Smita in writing of the Ethics Committee's decision and the specific code violations.
4. Schedule meetings with Arun and Smita to discuss the issues, get their perspectives, and hear if they have any mitigating factors to consider.
5. Determine the appropriate disciplinary actions for each case, with options potentially including training